Government extends 2-point VAT cut until mid-2024

supper market

The cut in value-added tax from 10% to 8% will remain in force through the first half of next year for most industries, according to a new government decree.

Telecommunications, finance-banking, securities, insurance, real estate, metal and metal products, and mining (excluding coal) will not enjoy the tax cut.

Business entities calculating tax under the direct method, where VAT is calculated as a percentage of their revenues, will get a 20% reduction in the tax rate used when issuing invoices.

The government had instructed the Ministry of Finance to review and extend the two-point VAT cut to mid-2024 instead of letting it expire at the end of this year, saying it would support businesses and consumers amid the economic downturn and unpredictable global developments.

The cut took effect on July 1 this year.

Since VAT is shared by businesses and consumers, both groups benefit from the reduction.

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